Research in Social Sciences and Humanities

Question: Discuss about the Research in Social Sciences and Humanities. Answer: Introduction: As a German e-commerce company, Lazada has attained much recognition in South East Asia since its inception in the year of 2011 (Wang et al. 2016). The organization has managed to emerge as the number one online shopping as well as selling destination in the South East Asia countries, namely Indonesia, Singapore, Malaysia, Philippines, Thailand and Vietnam. One of the major reasons why the company has been able to attain such unprecedented success within a short period of time, is that the company has been known for offering effortless shopping experience to its consumers via multiple channels as well as by multiple payment methods. Apart from the factor of innovation leading to the organizational success of the company, the companys focus on providing high quality consumer service has also helped it achieve business growth in the last years. Hence, considering the future prospects, the company is considering to expand in new markets, and the country India has been chosen for market expansion. However, before expanding in other markets, it would be important to comprehend the prospects of the market, analyze the competitive rivalry that the company can encounter there, as well as evaluate the strength of the company. Value Chain Analysis: Value chain of a firm consists of the two activities of the company i.e. the primary activities and the support activities. The primary activities consists of inventory holding, purchasing, materials holding, manufacturing, marketing and sales, outbound logistics, customer service and dealer support. On the other hand, support activities consist of research development, human resource management, design, infrastructure of the companys website as well as the company operations, etc. Value chain analysis of Lazada is important in order to expand its business in difderent parts of the world. Since it is an e-commerce business, the business operations are little bit different from that of brick and mortar stores (Hua, Morosan and DeFranco 2015). The website of the company is the platform of doing business in the market. Lazada is responsible for maintaining a value chain analysis of the website so that they can provide customer satisfaction along with value to the needs of the customers. The support activities of Lazada are the improved infrastructure activities that help in delivery of the products. The research and development department of the company always focus on continuous development of the website so that they can educate the viewers of the website. The human resource department of the company is focused on providing training to the employees so that they can focus on the innovation and excellent customer service to the customers (Lucia-Palacios et al. 2014). The primary activities of the Lazada website are sellers, platform, warehouse, delivery and finally to the consumer. After the product reaches to the consumer, another aspect that can be added is the excellent customer service. The sellers of the company include individually owned companies and 3rd party vendors. The platforms of the products of Lazada consist of business to consumer platform. It includes hybrid market, marketplace and store (Picoto, Blanger and Palma-dos-Reis 2014). The drivers of the company are inventory management, pricing strategies, currency, payment options, pricing, merchant tools, customer support, language, CMS, etc. The warehouse of Lazada can be of third party or sometimes owned by the company itself. It is essential as a cost driver. The hub n spoke model is used for the company. The delivery system of the products of Lazada is local model such as self-pick up, courier, etc. The reverse logistics of the company are driven by size, dependence and payment method. The consumers of the company not only belong to the local consumers but also it delivers products globally in many countries of the world (Cavusgil et al. 2014). Key Competencies of Lazada and the Ways in Which the Company Gains Competitive Advantage in Singapore: It is important to mention here that approximately 99% of the people living in South East Asia prefer to shop offline, and despite the fact, the unprecedented success of Lazada as an online site bears testimony to its excellent set of key competencies that help Lazada distinguish itself in the South East Asian market (Wee 2015). While speaking of Lazada, it should be remembered that Lazada has managed to emerge as a leading e-commerce business solution in Singapore and other South East Asian countries, by adopting effective strategies that can help in enhancing consumer convenience. In order to ensure that it can take maximum advantage of its growing consumer base, the company has modeled itself after the recognized dot.com giants like Alibaba and Amazon that in turn has helped it minimize its processing time, while maximizing consumer convenience. In order to attract as well as retain its customers it offers as many as 80,000 products, and at the same time, in order to handle the co nsumers queries, it has set up a 24/7 shopping arcade (Nguyen et al. 2016). The company has formulated as well as implemented effective strategies so as to improve its consumer satisfaction, and thus accordingly it has even formed alliance with many logistic providers as well, so that it can improve the processing time from 2 months to 2 days. Further, in order to attract the attention of the consumers, the company has tied up with some of the biggest retail giants of the world, such as Microsoft, Timex, Nestle, Unilever and P G, and thus it has surpassed every other shopping site, as the favorite shopping destination of every shopper. Another very important competency that the company possesses that helps the company increase its revenue over the years, is the diverse range of products that it offers to its customers. The online shopping site not only offers approximately 20,000 products, but it also offers the products under 12 different categories (Wee 2016). As a result, it is able to draw the attention of a young student looking for books and music, as well as his parents trying to get their home furnished. The product diversity largely helps the company achieve remarkable growth in its annual revenue. Lazada has emerged to be the reigning e-commerce operator in Singapore, and it is important to assess the factors that enable the company capitalize its strength in the Singaporean market. First of all, Lazada offers a high quality customer service to its consumers that are almost unrivalled in this industry of Singapore. The consumer service is open 24*7, and the consumers can get their queries resolved by reaching out the customer support team via phone or even live chat facilities. Further, the company also offers the easy return facility to its consumers, and consumers now can get their products delivered within a short period. According to the CEO of Lazada Singapore, Alexis Lanternier, the companys ties with some of the most recognized e-commerce giants like Alibaba allows the company gain competitive advantage over the rival companies (Shahnaz and Wahyono 2017). The company is least concerned about the competition, and more focused on retaining consumers, as e-commerce busines s can make or mar an organization based on how it is being executed. Since the Singapore e-commerce industry was still untapped and new, it has been easier for the company to acquire mass recognition without facing cut-throat competition. Hence, the company took the most advantage of the situation, and offered free shipping, product return facilities as well as better service delivery to its customers, that has helped it attract and retain its consumers. Macro-Environmental Analysis of the Market of India for Expansion of Lazada: Although Lazada is considering the idea of expanding in India, before the actual expansion, it would be important to evaluate the market of India. Hence, the macro environment of India will be analyzed, with the help of the PESTEL Analysis Tool and Porters Five Forces Tool: PESTEL Analysis: Political Factors Due to the existence of various political parties, the company can witness excessive political intervention while conducting its business Lack of political stability is a disadvantage Excessive corruption and red tape are also major problems to be considered (Kohli 2014) Economic Factors The economy of the country has been very stable since the Industrial Reform Policy of 1991 (Cassen 2016) The country has witnessed an economic growth of 6% in the recent times, and it is expected to boost over the years (Breman 2013) The government has also set up the Foreign Investment Promotion Board that is meant for facilitating foreign companies conduct trade in the country Social Factors India is a highly populated nation, with as many as 1,2 billion people residing in it Around 63 % of the people belong to the age category of 14 to 64 years, and a large number of people are employed, unable to find time to shop offline (Lambert 2017). Rise in education has resulted in the higher rate of employment of the Indians, improving the standard of life Cheap availability of skilled labor (Lambert 2017) Technological Factors India has witnessed a remarkable growth in technological infrastructure over the last years Most of the people are tech savvy, having internet connection Research and Developmental opportunity is limited Environmental Factors Strong regulations on waste disposal, however are not applicable for e-commerce business Use of eco-friendly packages will be recommended (Gupta 2015) Legal Factors The government imposes taxes among other regulatory measures to promote economic growth Labor laws such as Labor Compensation laws or Child Labor Laws are almost irrelevant. Porters Five Forces Analysis: Threat of New Entrant This is moderate as FDI is allowed to invest 51% in multi brand retail market, so that new companies can get lots of funding options (Mohapatra 2013). Threat of Substitutes Moderately high as many traditional stores are available both online and offline in India. Bargaining Power of Suppliers It is very low as there is a high competition Bargaining Power of Buyers High as a large number of e-commerce sites are operating in India. Competitive Rivalry High as the company faces cut-throat competition from Amazon, Flipkart and Snapdeal (Shetty 2017). Strength of Top 3 e-commerce Companies of India and Ways in which Lazada can compete with them: Lazada is the privately owned German ecommerce website which has soared in the Southeast Asian market. The company was founded in 2011 and within just the period of 3 years, the website became tremendously popular in Indonesia, Malaysia, Thailand, Philippines and Singapore, monopolizing the online shopping market in South-Eastern Asia. This tremendous success of the website has encouraged the owners to expand in other potential markets like that of India (Jain and Kulhar 2015). However in order to attain a successful expansion it is very important for an online retail chain to generate a reliable market value in the expansion target market. However, in case of India, there already are a number of ecommerce websites that have established a stable footing in the Indian market (Bhattacharya and Mishra 2015). As mentioned above, Indian market is no stranger to the advantages of online shopping, with its growing economy there already are three websites sharing monopoly over Indian market. These websites are popular and have gained the trust of the Indian customers; and will be a great threat to the smooth reception of Lazada in India. The first online shopping website, operating in India that deserves the spotlight of attention is the Amazon, the franchise of amazon.com in India. Amazon.com is considered to be the online marketing giants originated in America is arguably on o the most trusted ecommerce website in all over the world (Amazon.in. 2017). The journey of Amazon started in 2013 in India and has grown significantly ever since. Amazon.in, the Indian operation has already generated a formidable presence in the Indian market. Market analysts have opined that the huge success behind Amazon in India has been the enormous product variety that it offered the Indian market and the massive discounts it comes coupled with (Bhattacharya and Mishra 2015). Having amazon.om as the ally, Amazon.in could offer the Indian market the global markets that they previously had to access and the discounts added an extra feather as well. Indian customers are accustomed to finding all they could want at an affordable rate in thei r Amazon app sticking true to their claim of providing anything and everything to your doorstep (Amazon.in. 2017). The second mention needs to be the Snapdeal app without any doubt; the website launched in the Indian market in 2010 and has integrated itself in the lives of the Indian customers. The ecommerce website has a market value of 6.5 billion dollars and the growth has not attained stagnancy yet (Snapdeal.com. 2017). With brand promotion done by Aamir khan, a well known and loved face in India, has helped Snapdeal to attain a remarkable presence in the Indian market and will be an exceptional competition for Lazada in India (Snapdeal.com. 2017). Saving the best for the last, discussion on Indian online shopping market cannot be complete without discussing the market giant of India, Flipkart (Jain and Kulhar 2015). Flipkart started out its journey in India in 2007 and have dominated the Indian market ever since. According recent market research the website is worth more than 11 billion dollar and the figures continues to rise (Flipkart.com. 2017). Mainly operated on the smartphones the app for Flipkart is ranked 4.2 out of 5 on basis of maximum downloads. Studies suggest that the tremendous success behind Flipkart has been the element of surprise (Sequeira 2015). The website was launched in 2007 when India was a complete stranger to online shopping, the website dominated the market for three long years without any competition in sight, and these three years have been more than enough to generate a wide customer base by providing a gazillion products and brands at attractive discounts delivered to your doorstep. Flipkart has a cquired all the known names in Indian fashion and retail market, namely Myntra, Jabong and ebay.in, and undoubtedly poses the biggest threat to Lazada with its complete dominance over Indian market (Kalelkar et al. 2014). Different Modes of Entry into foreign market: Invasion into a foreign market comes coupled with risks at all times, and if not addressed these risks can manifest into challenges which will make establishing a stable presence in the foreign market extremely difficult for a business operation (Brouthers 2013). As discussed above in the assignment Lazada is the biggest ecommerce website in the south eastern Asia which now plans to expand into the rapidly growing economy of India. However India already has its online shopping market dominated by various other ecommerce websites, three substantial of those have been discussed above (Jain and Kulhar 2015). In order to combat the threat these websites that already have a stable customer base and a reputation in Indian market, the website needs to decide on a mode of entry (Martin 2013). There are various modes by which a business venture can choose to enter the foreign market, be it direct and indirect exporting, franchising, strategic alliance and merger acquisition. All of the different modes of entries have their own sets of benefits and pitfalls. For instance, franchising allows the expanding business venture to generate a franchisor to sell its products for a prefixed fee (Martin 2013). Get Strategic alliance is where the invading business operation will forge an alliance with a known face in the target market to achieve larger goals. Merger acquisition is a mode of strategic alliance that allows the invading business operation to merge with a business operation that has been already established in the market and has a considerable hold on the target market (Shi, Sun and Prescott 2012). In the case scenario opted for this assignment, franchising in to direct or indirect exporting would not yield favourable results it has to be understood that Lazada needs to develop a recognition in the Indian market, build trust in the Indian customers in order to establish a stable footing in the market (Kalelkar et al. 2014). Indian customer base is completely stranger to the website and its reputation and franchising or exporting an array of products will not be enough for the customers to be trust the website or the product it sells. In order to overcome the challenges of invading into a foreign market and combat the threats of competition by the well known Indian ecommerce websites is to merge with a well known website (Brouthers 2013). Considering the market value and reputation of Flipkart, merging with it will be the best decision for Lazada. The customer base of Flipkart in Indian market is already astounding and with the trust that the website has constructed, introducing foreign brands will increase their market craze in the Indian market and will offer Lazada enough time and market exposure to establish a brand reputation in the market (Kalelkar et al. 2014). Flipkart undoubtedly presents a humongous threat to Lazada if it wants a share of the monopoly of Indian market as well (Chauhan 2015). Keeping the enemy closer, or in this merging with them will be the win-win situation for both parties until Lazada generates enough recognition in the Indian market to branch out on its own. Conclusion: As it is evident from the above discussion, India is a favorable place to expand. Considering the growth in technological infrastructure, and improvement in the standard of living of the people, the company can attain huge growth here. The population is very huge implying larger customer base while the availability of skilled labor would help the company ensure higher profitability. Although initially, the company may encounter trouble in gaining sufficient recognition in the new market, considering the strong presence of e-commerce giants like Amazon and Snapdeal, the company can nevertheless attain sufficient growth with the help of its consumer friendly services. The company has a strong presence in South East Asia, and consequently provided it introduces aggressive marketing strategies, it will be able to gain much recognition in another Asian country, India. It is recommended that the company enters the Indian market by merging with Flipkart. 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